This is a competing renewal of a Program Project Grant, currently in its 16th year, which focuses on the molecular regulation of lung development. The program has been highly successful in bringing together an interactive multidisciplinary team of investigators to explore this theme, and has resulted in significant contributions to the field. This renewal consists of five interactive projects to study determinants of cell fate and differentiation in the developing lung. These projects address critical and poorly understood issues on the mechanisms of establishment of lung cell lineages, and on how this relates to morphogenesis and acquisition of differentiated cellular phenotypes. Project 1 addresses questions related to how the initial respiratory lineages are spatially organized and expanded during early morphogenesis, and the role of Notch and Fgfs in this process. Project 2 will focus on the mechanisms by which endogenous microRNAs control dynamic gene activity during proximal-distal specification of the lung. Project 3 develops new tools exploring a mouse ES cell culture system to study the genetic mechanisms that control early lung lineage specification. Project 4 focuses on mechanisms of chromatin remodeling and DNA methylation in the regulation of gene transcription during early lung development. Project 5 examines how hematopoletic-derived cells contribute to the development of lung structure and to the establishment of native immunity. Besides these projects, three cores are proposed. The Administrative Core will deal with the overall management and financial aspects of the Program. The Microscopy-Image Analysis and FACS Core will provide resources for histology, analysis of gene/protein expression by standard or confocal microscopy and for cell sorting: The Mouse Core will support the investigators in maintaining the various existing mouse lines, breeding, genotyping, and for designing constructs of new mouse lines. The projects and cores are designed to be highly interactive, with extensive sharing of expertise, reagents and model systems. Results from these studies will provide relevant insights into mechanisms of lung development and stem cell biology.